Sharia Goldbugs: How ISIS Created a Currency for World Domination

As Islamic State (ISIS) sought to dominate massive elements of Syria and Iraq, it used a delicate weapon to go together with the automotive bombs and suicide assaults: cash.

The self-declared caliphate aimed to unify the world underneath a militant interpretation of Islam. It created a extremely environment friendly, hyper-violent society inside Iraq and Syria, coupled with an financial experiment – what I name “ISIS-coin.”

Consisting of 10 cash ranging in worth from almost a thousand {dollars} to pennies, ISIS sought to switch U.S., Iraqi and Syrian banknotes with purpose-built cash backed by the gold, silver and copper customary.

At the time, ISIS was sitting on 34,000 sq. miles of oil-rich territory. By buying and selling oil utilizing its personal foreign money, the dinar, ISIS deliberate to destabilize the U.S. financial system by forcibly decoupling the greenback from the oil enterprise (the petro-dollar system, which ISIS refers to as America’s “Achilles heel”).

The dinar was modeled on coinage from a medieval Islamic empire named the Umayyad Caliphate, the chief of which – a person named Abd al-Malik ibn Marwan – issued cash to economically join Muslims who had been scattered throughout the Middle East.

In 2015, the dinar was made obligatory for civilians dwelling underneath ISIS management. At its peak, ISIS managed 10 million individuals throughout Iraq and Syria – making the ISIS dinar among the many most formidable financial experiments in fashionable historical past.

While dwelling within the autonomous Rojava, in northern Syria, I met with an ISIS prisoner, Mohammed Najjar, in a facility operated by the Syrian Democratic Forces in Northern Syria. Najjar refused to be photographed or filmed. He was nervous about my sound recorder, and requested me to not publish his identify for worry of repercussions from the jihadist group (Mohammed Najjar is a pseudonym).

Najjar labored in oil: ISIS’s most profitable export and the center of the dinar experiment. He laughed as I positioned a silver dirham down on the desk in entrance of him. It’s a large coin, a couple of centimeter in diameter. It is adorned with Arabic calligraphy – a verse from the Hadith that praises laborious work and charity.

“In Islamic State, this was a failure,” he mentioned, grinning, “It didn’t work.”

In a 2015 propaganda movie saying its launch, referred to as , ISIS’s financial experiment is described as a sequel to the 2001 assaults on the World Trade Center – and a brand new weapon in an all-out struggle in opposition to the US financial system.

“You’ve seen the documentary, right?” Najjar asks with a twinkle in his eye, including:

“The plan was to destroy the global economy.”

The gross sales pitch

Najjar joined ISIS in October 2013, months after its formation.

With a background in petroleum research, he spent his days working amongst oil fields, the center of ISIS’s financial technique.

Controlling many oil-rich areas in Iraq and Syria, ISIS had a profitable enterprise in promoting oil to neighboring purchasers, together with Damascus, the Iraqi authorities, and Turkish-backed rebels, which, based on my supply, would then smuggle the oil into Turkey.

“It was the boom,” Najjar mentioned, “Islamic State was making about $60 million a month.”

The downside for ISIS was that each one that commerce was executed in U.S. {dollars}. So regardless of the group’s declared struggle on U.S. hegemony, its financial system was really facilitating U.S. greenback dominance.

Enter the dinar – or, as ISIS propaganda describes it: “The return of the ultimate measure of wealth for the world: gold – as the [caliphate] surges into the financial sphere.”

First, it was launched within the oil sector – ISIS’s most profitable export. To purchase oil from ISIS, international locations needed to trade their {dollars} for dinar.

ISIS then launched the dinar to civilians inside the Islamic State, slowly at first, with retailers giving change within the new dinar versus banknotes.

By late 2015, the foreign money turned obligatory. Said Najjar:

“It was prohibited to use the Syrian government currency. It was prohibited to use anything other than the ISIS dinar in all the Islamic State areas.”

The Islamic State was plagued by exchanges, he defined, which might swap ISIS dinar for {dollars} and different currencies, permitting individuals and companies to commerce with each other.

This got here with different benefits for the Islamic State.

While the market worth for a 4.25-gram gold dinar was round $160, based on Najjar, it might retail regionally at $190. That meant a revenue of $30 per dinar for ISIS: a colossal sum when its oil commerce was peaking at 150,000 barrels a day.


The ISIS dinar wasn’t only a cash seize.

It was additionally an try to create an financial system primarily based on Islamic rules. And that’s as a result of, in Sharia legislation – the non secular authorized code underpinning Islam – sure sorts of financial practices are forbidden.

Sharia places a ban on curiosity – what known as riba – which, based on some interpretations, guidelines out many standard banking practices. Certain sorts of debt are additionally forbidden, as a result of transactions have to be backed by an underlying asset, like gold.

The dinar experiment had its roots within the teachings of Islamic students corresponding to Sayyid Abdil A’la Mawdudi, who proposed a middle-ground different to capitalism and communism and emphasised the significance of zakat, or charity. ISIS’s distinctive interpretation of zakat allowed the group to fund a lot of its state-building efforts via the contributions of civilians.

The New York Times reported that this tax fashioned the premise of the ISIS financial system, stating that revenue from zakat far outweighed oil gross sales.

But Najjar vehemently denied this level, calling it “lies” and stating that the individuals in ISIS-occupied territories had been too poor to contribute in any significant manner.

That’s notable as a result of, in propaganda, ISIS describes standard banking practices as “satanic,” and proposes the dinar as an antidote to the “fraudulent and riba-based financial system of enslavement orchestrated by the Federal Reserve in America.”

U.S. thinkers, corresponding to famous goldbug Mike Maloney, conspiracy theorist Edward Griffin and libertarian politician Ron Paul are quoted instantly in ISIS propaganda. In rhetoric not unfamiliar to bitcoin fanatics, the thinkers criticize the inflation of the U.S. greenback, the abandonment of the gold customary, and the dominance of the greenback globally.

“The U.S. is playing a game in controlling the world by using the dollars,” Najjar mentioned, including:

“Oil you have to buy using dollars. Internationally you have to buy everything using dollars. The dinar was more Islamic. Dinar has a real value, gold has a real value.”

Why it failed

Despite the profitable launch of the dinar, ISIS remained susceptible to financial assaults. When, in 2019, the U.S. started a bombing marketing campaign in opposition to ISIS’s oil fields, the so-called state started to crumble as a result of it was minimize off from its most profitable sources.

Najjar says the dinar labored higher as a way of trade within the oil business than an on a regular basis foreign money for ISIS residents and companies.

“We used to get it in dollars. Then they changed it to the dinar and that’s when the problems started,” he mentioned. “Traders stopped bringing in products because they noticed the dinar was not working, so they started retreating from it.”

With demand non-existent exterior of the Islamic State, the foreign money started to trade for lower than it price to supply.

“The problem was always in buying products. The value of the silver dinar, in particular, was so low. So when you go to a trader to buy anything they won’t accept this, they say, ‘Ah, we’re not accepting this.’ Or he put the price higher,” Najjar mentioned.

Because of its weight – the most important coin is value almost a thousand {dollars} on the time of writing – the gold dinar was coveted by merchants and was usually melted down or resold in the marketplace, successfully draining out the gold-based financial system.

Not fairly bitcoin

Given the restrictions of a Sharia-compliant monetary system, together with the prohibition on riba, cryptocurrencies have been touted as potential alternate options.

CoinDesk just lately reported that the Ethereum Foundation, the non-profit that oversees the administration of the ethereum platform, was courting traders from Wahhabist Saudi Arabia, for instance.

But Najjar mentioned that, whereas he had “heard of bitcoin,” he by no means heard of it being utilized by ISIS.

An SDF intelligence official confirmed that ISIS was depending on the U.S. greenback for worldwide commerce. Other terror organizations have experimented extensively with crypto.

ISIS misplaced its final territory to U.S.-backed SDF forces in May. At the time, U.S. forces are mentioned to have collected some $2.1 billion value of gold – and intelligence officers are hoping to find extra.

“Whenever I go to an interview like this they ask me, ‘Where is the gold? Where is ISIS hiding it?’” Najjar laughed.

In North Syria, the dinar has fallen out of circulation. Some are handed round between SDF fighters as struggle trophies. These are principally copper and silver – the costlier currencies just like the gold dinar have largely been melted down. Reselling the foreign money is illegitimate and people in circulation are seized by authorities, except for a handful saved as souvenirs.

According to Najjar, the failure of the dinar – and Islamic State extra broadly – was as a result of it did not implement Sharia appropriately.

“Islam says take from the rich and give it to the poor,” he mentioned, including:

“It was not properly done. It was not implemented properly, it wouldn’t fall. I see it like this.”

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